CNET Amplifies FCC's Carr's Attempt To Force 'Big Tech' To Pay 'Big Telecom' For No Reason

Say That Again

from the troll-tolls dept

So last week we noted how FCC Commissioner Brendan Carr had taken to Newsweek to dust off a fifteen year old AT&T talking point. Namely that “big tech” companies get a “free ride” on telecom networks, and, as a result, should throw billions of dollars at “big telecom” for no real reason. You’ll recall it was this kind of argument that launched the net neutrality debate, when former AT&T CEO Ed Whitacre proclaimed that Google wouldn’t be allowed to “ride his pipes for free.” Whitacre was effectively arguing that in addition to paying for bandwidth, tech giants should pay him a troll toll, just because.

As we noted last week, this claim that technology giants (or anybody, really) gets a “free ride” when it comes to US telecom networks is laughable. Companies like Amazon, Google, and Netflix all pay billions of dollars in total for undersea cable runs, massive cloud storage, transit routes, and content delivery networks. Hell, Google is even a residential ISP. That’s on top of the money consumers, businesses, and Silicon Valley giants pay for their own bandwidth, which in the US is often some of the highest in the developed world thanks to regional monopolization and captured regulators (precisely like Carr).

In reality, the argument that “big tech” gets a “free ride” has long been a flimsy proxy for telecom providers who believe it’s their God-given right to get a cut of massive Silicon Valley ad revenues, even if that makes no coherent sense. It has popped up again and again for fifteen straight years, usually out of the mouths of those prodded into making it by telecom policy and lobbying organizations.

So when it popped up again last week I was fairly sure it would be ignored. Until CNET grabbed Carr’s column believing it was in good faith, and amplified it to even more people:

“In a follow-up interview with CNET on Friday, Carr said companies like Facebook, Amazon, Apple and Netflix have been enjoying a free ride on the internet infrastructure, while millions of Americans have been paying what amounts to an additional tax on their telephone bills for broadband service.

“It’s time for Big Tech to pay its fair share,” Carr said.

CNET barely challenges Carr’s assertion that these companies get a “free ride,” even though you can’t go five feet without running into an announcement where a company like Google is spending big bucks on telecom infrastructure. While Carr is right that the existing FCC USF and subsidization model does need fixing as contributions drop, Carr’s not actually coming at this argument in good faith. If he were, he’d be able to mention in passing the billions we throw at telecom giants for fiber networks they routinely half deploy, or the countless examples of outright subsidy fraud that have plagued the telecom sector for years.

Instead the onus for funding America’s unfinished broadband deployments is for whatever reason thrown at the feet of Silicon Valley, something Carr rambles on at length about, as if telecom sector monopolization/corruption and FCC incompetence is somehow Silicon Valley’s fault:

“When it comes to deciding which companies should contribute to the fund and how much they should be required to pay, Carr suggests that legislators look at companies that benefit the most financially from the use of internet infrastructure.

…”For instance, Google’s ad revenues — I think those are fair game for looking at a charge to support the network,” he said. “The same with Facebook or Apple’s App Store, maybe even iPhone cloud services and certainly the streamers.”

But again, this presumes that these companies don’t already pay massive amounts of money for bandwidth and telecom infrastructure. Or that telecom giants have somehow received an unfair shake, despite gleaning untold billions in tax cuts, subsidies, merger approvals, and regulatory favors in exchange for network investment and job promises that routinely never show up. CNET does at least point out this is all not new, though it’s framed in the “he said, she said” view from nowhere journalistic approach that usually leaves readers wondering which side is telling the truth:

“This is an argument that large internet service providers have been pushing for years,” former FCC Chairman Tom Wheeler said in an interview. In 2006, AT&T’s former CEO Edward Whitacre was among the first to suggest publicly that companies such as Google shouldn’t be given a “free ride” on his network. The comments ignited more than a decade of debate over net neutrality regulations.

CNET then proceeds to quote the telecom lobby, trotting out Rick Boucher, one time fair use champion turned AT&T lobbying and policy prop:

“Groups representing the telecommunications industry largely support Carr’s proposal. The Internet Innovation Alliance, which represents AT&T along with telecom equipment makers like Alcatel Lucent, Ciena and Corning, says it makes sense. “Requiring Big Tech to help close the digital divide is an obvious and attractive solution to the Universal Service Fund (USF) crisis,” former Rep. Rick Boucher, an honorary chair of the organization, said in a statement. “It makes sense for the Amazons, Googles, Apples and Facebooks of the world — that depend upon and benefit from Americans being online — to back efforts to achieve universal broadband. It’s in their interest, as their user bases would be bolstered.”

But it doesn’t make sense in the broader context of the fact that US taxpayers have thrown countless billions already at telecom giants for fiber networks that mysteriously only wind up half deployed. That’s not Amazon, Netflix, or Google’s responsibility to fix, however much justified animosity you may have at these companies for dodgy behavior on numerous other fronts.

The story ends with Carr getting the last word about how he’s just looking out for the little guy. But there’s been no indication, at any point in Carr’s long history of questionable claims, that this is actually true. What’s more likely is that companies like AT&T, worried about the Biden broadband plan driving competition into their markets, want to capitalize on the animosity toward “big tech” by once again trotting out a lame argument that the real solution lies not in holding legislators, regulators, or telecom giants accountable for years of fraud and wasted money, but in taxing Silicon Valley. And Carr, never one to see a telecom argument he doesn’t breathlessly support, was more than happy to amplify it.

Filed Under: big tech, brendan carr, fcc, free ride